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DEPARTMENT OF THE TREASURY

WASHINGTON, D.C. 20220

October 20, 2017

Department of the Treasury 2017-2018 Priority Guidance Plan

Joint Statement by:

David J. Kautter

Assistant Secretary for Tax Policy U.S. Department of the Treasury

John A. Koskinen

Commissioner Internal Revenue Service

William M. Paul

Acting Chief Counsel Internal Revenue Service

We are pleased to announce the release of the 2017-2018 Priority Guidance Plan. As described below, the 2017-2018 Priority Guidance Plan sets forth guidance priorities for the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) based on public input, and taking into account the burden-reducing policies and reforms described in Section 1 of Executive Order 13789 (April 21, 2017; 82 FR 19317) and Executive Order 13777 (February 24, 2017; 82 FR 9339). The 2017-2018 Priority Guidance Plan contains guidance projects that we hope to complete during the twelve-month period from July 1, 2017, through June 30, 2018 (the plan year). Part 1 of the plan focuses on the eight regulations from 2016 that were identified pursuant to Executive Order 13789 and our intended actions with respect to those regulations. Part 2 of the plan describes certain projects that we have identified as burden reducing and that we believe can be completed in the 8 months remaining in the plan year. As in the past, we intend to update the plan on a quarterly basis, and additional burden reduction projects may be added. Part 3 of the plan describes the various projects that comprise our implementation of the new statutory partnership audit regime, which has been a topic of significant concern and focus as the statutory rules go into effect on January 1, 2018. Part 4 of the plan, in line with past years plans and our long-standing commitment to transparency in the process, describes specific projects by subject area that will be the focus of the balance of our efforts this plan year. Many of these projects are included on the plan in response to specific requests for

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guidance from interested stakeholders. In addition, many of these projects afford burden reduction by providing taxpayers and their advisers with clarity as to the application of the tax law so that businesses and individuals can significantly reduce the time needed to plan their affairs with certainty as to their tax consequences. Finally, most of these projects do not involve the issuance of new regulations. Rather, they will provide helpful guidance to taxpayers on a variety of tax issues important to individuals and businesses in the form of: (1) revocations of final, temporary, or proposed regulations; (2) notices, revenue rulings, and revenue procedures; and (3) simplifying and burden reducing amendments to existing regulations. As in past years, we solicited comments from taxpayers to develop our Priority Guidance Plan, and we received many thoughtful suggestions for areas where guidance could clarify existing rules, eliminate unnecessary complexity, and provide reliance authority in areas where non-precedential IRS rules already exist. With respect to all of the projects described in this plan (as well any added in our quarterly updates), regardless of how they are categorized here, we will be guided by the burden-reducing principles and policies described in aforementioned Executive Orders, and focusing on reducing burdens and complexity wherever possible. As in past years, we intend to update and republish the 2017-2018 plan during the plan year to reflect additional items that have become priorities and guidance that we have published during the plan year. The periodic updates allow us flexibility to consider comments received from taxpayers and tax practitioners relating to additional guidance priorities and to respond to developments arising during the plan year. The published guidance process can be fully successful only if we have the benefit of the insight and experience of taxpayers and practitioners who must apply the internal revenue laws. Therefore, we invite the public to continue to provide us with their comments and suggestions as we develop guidance throughout the plan year. Additional copies of the 2017-2018 Priority Guidance Plan can be obtained from the IRS website at http://www.irs.gov/uac/Priority-Guidance-Plan. Copies can also be obtained by calling Treasurys Office of Public Affairs at (202) 622-2960.

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OFFICE OF TAX POLICY AND

INTERNAL REVENUE SERVICE

2017-2018 PRIORITY GUIDANCE PLAN

Updated as of October 12, 2017

Released October 20, 2017

PART 1. E.O. 13789 - IDENTIFYING AND REDUCING REGULATORY BURDENS

1. Withdrawal of proposed regulations under 2704 regarding restrictions on liquidation of an interest for estate, gift, and generation-skipping transfer taxes. Proposed regulations were published on August 4, 2016.

2. Withdrawal of proposed regulations under 103 regarding the definition of political subdivision. Proposed regulations were published on February 23, 2016.

3. Proposed amendment of regulations under 7602 regarding the participation of attorneys described in 6103(n) in a summons interview. Final regulations were published on July 14, 2016.

4. Proposed removal of temporary regulations under 707 concerning treatment of liabilities for disguised sale purposes and review of regulations under 752 concerning liabilities recognized as recourse partnership liabilities. Temporary and proposed regulations were published on October 5, 2016.

5. Delay and proposed removal of documentation regulations under 385 and review of other regulations under 385. Final, temporary, and proposed regulations were published on October 21, 2016.

PUBLISHED 08/14/17 in IRB 2017-33 as NOT. 2017-36 (RELEASED 07/28/17).

6. Proposed modification of regulations under 367 regarding the treatment of certain transfers of property to foreign corporations. Final regulations were published on December 16, 2016.

7. Proposed modification of regulations under 337(d) regarding certain transfers of property to regulated investment companies (RICs) and real estate investment trusts (REITs). Temporary and proposed regulations were published on June 8, 2016.

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8. Proposed modification of regulations under 987 on income and currency gain or loss with respect to a 987 qualified business unit. Final regulations were published on December 8, 2016.

PART 2. NEAR-TERM BURDEN REDUCTION

1. Guidance removing or updating regulations that are unnecessary, create undue complexity, impose excessive burdens, or fail to provide clarity and useful guidance.

2. Guidance under 871(m), including with respect to non-delta-one transactions.

PUBLISHED 08/21/17 in IRB 2017-34 as NOT. 2017-42 (RELEASED 08/05/17).

3. Guidance under Chapter 3 (14411446) and Chapter 4 (14711474). Final and temporary regulations were published on January 6, 2017. Guidance may include the following: addressing withholding on gross proceeds and foreign passthru payments under Chapter 4; coordinating certain documentation requirements for participating foreign financial institutions with the requirements under IGAs; revising the withholding requirements on insurance premiums under Chapter 4; guidance concerning certain due diligence requirements of withholding agents under Chapter 3, including the requirement to collect and report foreign taxpayer identification numbers of certain accountholders; and guidance on refunds and credits under Chapter 3, Chapter 4, and related provisions. Notice 2015-10 (regarding refunds and credits) was published on May 18, 2015.

PUBLISHED 10/10/17 in IRB 2017-41 as NOT. 2017-46 (RELEASED 09/25/17).

4. Regulations under 1014(f) and 6035 regarding basis consistency between estate and person acquiring property from decedent. Proposed and temporary regulations were published on March 4, 2016.

5. Guidance under 170(e)(3) regarding charitable contributions of inventory.

6. Final regulations under 263A regarding the inclusion of negative amounts in additional 263A costs. Proposed regulations were published on September 5, 2012.

7. Final regulations under 4051 and 4071 on heavy trucks, tractors, trailers, and tires. Proposed regulations were published on March 31, 2016.

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8. Final regulations under 2642(g) describing the circumstances and procedures under which an extension of time will be granted to allocate GST exemption.

9. Regulations streamlining the 754 election statement.

PUBLISHED 10/12/17 in FR as REG-116256-17 (NPRM).

10. Guidance under 1362(f) regarding the validity or continuation of an S corporation election in certain situations involving disproportionate distributions, inconsistent tax return filings, or omissions on Form 2553, Election by a Small Business Corporation.

11. Guidance under 301.9100 regarding relief for late regulatory elections.

12. Relief for late elections due to erroneously late-filed partnership and REMIC returns.

PUBLISHED 09/18/17 in IRB 2017-38 as NOT. 2017-47 (RELEASED 09/01/17).

13. Final regulations under 3402(q). Proposed regulations were published on December 30, 2016.

PUBLISHED 09/27/17 in FR as TD 9824.

14. Guidance on refunds under Combat-Injured Veterans Tax Fairness Act.

15. Guidance under 954(c) regarding foreign currency gains.

16. Guidance under 954, including regarding the use of foreign statement reserves for purposes of measuring qualified insurance income under 954(i).

17. Final regulations and related guidance on closed defined benefit plans and related matters. Proposed regulations wer